BeautyHealth Releases Financial Results for Full Year and Fourth Quarter of 2023

The Beauty Health Company (NASDAQ: SKIN), known for its flagship brand Hydrafacial, has announced its financial performance for the full year and fourth quarter ended December 31, 2023. Full-year net sales reached $398.0 million, marking an 8.8% increase compared to 2022. However, fourth-quarter net sales were $96.8 million, reflecting a slight decrease of (1.3)% year-over-year. This decline was primarily attributed to lower equipment sales in the Americas, although it was partially offset by steady growth in consumables net sales in the Americas and increased device placement in the Asia-Pacific region.

Marla Beck, CEO of BeautyHealth, commented on the results, stating, “To close 2023, we delivered fourth-quarter financial results consistent with the expectations we outlined on our last earnings call. While the results reflect a necessary operational reset, the underlying strength of our business remains intact—a clinically proven treatment, passionate provider community, unique partner portfolio, beloved consumer brand, and a growing addressable market. I am confident in the still-untapped global opportunity for BeautyHealth.”

Here are some highlights from the fourth quarter and full-year financials:

Fourth Quarter Financial Highlights:

  • Net sales for the fourth quarter of 2023 were $96.8 million, down (1.3)% compared to the prior year period, with challenges in the Americas offset by growth in APAC and EMEA.
  • Gross margin decreased to 47.2% in Q4 2023 from 67.8% in Q4 2022, primarily due to higher inventory-related charges and product and warranty costs.
  • Net loss was $(9.4) million in Q4 2023 compared to net income of $6.5 million in Q4 2022, mainly due to gross margin pressures.
  • Adjusted EBITDA was $3.4 million in Q4 2023 compared to $17.6 million in Q4 2022, primarily due to gross margin pressures.

Full Year Financial Highlights:

  • Net sales for 2023 reached $398.0 million, up 8.8% compared to the prior year period, driven by growth in APAC and EMEA.
  • Gross margin decreased to 39.0% in 2023 from 68.0% in 2022, primarily due to inventory write-downs and charges associated with the Syndeo Program, as well as higher inventory-related charges and product costs.
  • Net loss was $(100.1) million in 2023 compared to net income of $44.2 million in 2022, primarily due to gross margin pressures.
  • Adjusted EBITDA was $24.3 million in 2023 compared to $46.1 million in 2022, primarily due to gross margin pressures.

The company placed 1,551 delivery systems during the fourth quarter and 8,287 delivery systems throughout 2023, with challenges in the Americas partially offset by growth in APAC and EMEA.

Regarding balance sheet and cash flow highlights, cash and cash equivalents were approximately $523.0 million as of December 31, 2023. The company also announced a $100.0 million share repurchase authorization in September 2023 and redeemed $75.0 million principal amount of Notes in January 2024.

BeautyHealth will host a conference call on Tuesday, March 12, 2024, at 4:30 p.m. ET to discuss its financial results. The call can be accessed via live webcast through the Events & Presentations page on the company’s Investor Relations website. A replay will be available online approximately three hours after the conclusion of the call.

The company utilizes certain non-GAAP financial measures such as adjusted gross profit and adjusted EBITDA for evaluating ongoing operations and internal planning and forecasting purposes. Management believes that these measures, when reviewed collectively with GAAP financial information, provide useful supplemental information to investors in assessing the company’s operating performance. However, these non-GAAP financial measures should not be considered as alternatives to GAAP financial information.

For further details, including a reconciliation of fiscal 2023 adjusted EBITDA margin guidance to net income and information on forward-looking statements, investors are encouraged to refer to the company’s official disclosures.

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